Increasing skill levels is an important contributor to a more productive economy, but the right skills need to be available in the right place at the right time, experts said at an Ai Group webinar last week.
Work also needs to be organised in a way that most effectively utilises the skills that are available, Ai Group Centre of Education and Training (Ai Group CET) Executive Director Caroline Smith said.
“As we move towards the second quarter of the century, the focus on improving productivity is important, because it enables sustainable economic and income growth and has many other economic and social benefits as well,” Dr Smith said.
“At the enterprise level, increasing skills and capabilities can translate into a more productive generation of outputs and higher wages, both in relation to existing activities and by enabling enterprises to move up their value chain.
“Productivity gains support the ability to invest in services such as healthcare, education and infrastructure, so it's timely to focus on how skills and capability development can drive productivity.”
The Ai Group CET released a position paper titled Australia's Opportunity: A skills and productivity agenda in December last year.
The paper focuses on driving productivity growth through human capital and capability development through skills, education and training.
The position paper identifies seven key capability development priorities for a productive future for Australia.
These include:
In its Advancing Prosperity 5-year Productivity Inquiry Report, the Productivity Commission focused on education and skilled migration as it explored the role of human capital in boosting productivity.
Webinar guest speaker Alex Robson, the Commission’s Deputy Chair, said: “We’ve had slowing productivity growth over the past decade or so.
“There was an uptick during Covid, but then it subsequently declined, and we're back at roughly 2016 levels,” Prof Robson said.
“But most of that productivity growth has come from capital deepening, which is investment — and even that's been sluggish.
“There’s been hardly any growth in what we call multi-factor productivity, which is improvement in knowledge and openness and everything other than capital.
“The challenge for our education systems and skill development is to see what can be done to improve the growth rate of aggregate productivity.”
“The mix of skills required by employers in Australia has been changing over time,” Prof Robson said.
“The trend is towards jobs that require ‘non-routine cognitive skills’, largely found in service industries such as healthcare, education, financial services and telecommunications, which now make up about 80% of Australia's GDP.
“Demand for these skills has grown substantially over the past few decades.
“If that trend continues, the role of human capital and individuals being able to do these jobs that require non-routine cognitive skills will be growing over time.
“Meeting that demand is a challenge for education and skills systems.”
“There's an even greater policy challenge: the number of workers per retiree is declining over time,” Prof Robson said.
“We are going to need a lot more workers into the future to deal with the issue of an ageing population, particularly in the care economy but also in areas like childcare, disability care, care for veterans as well as education and health more generally.
“It's happening already, but that challenge will become greater as we move into the future where the services industries are going to become more prevalent.
“Having workers with the right skills is an ongoing issue in Australia that we need to keep on top of.”
These challenges are real for Ai Group member SAGE Automation, fellow webinar guest speaker Lesley Marchioro said.
“Our organisation is not immune to the productivity challenges occurring in the broader economy,” she said.
“Over the past three years, SAGE has nearly doubled its workforce to just over 800 team members.
“With that significant growth comes a number of challenges in terms of maintaining productivity — making sure you have the right people at the right time with the right skills.
“As our business grows, we've strengthened the offering we provide to our people, particularly when it comes to upskilling: learning and development.
It’s part of our EVP (Employee Value Proposition). We say to people coming to SAGE: ‘You’ll get a significant amount of learning in a variety of areas and the opportunity to work on exciting projects.’”
Australia's education system is good overall, but more can be done to improve productivity and advance prosperity, Prof Robson said.
One area that saps teachers’ productivity is the amount of time spent preparing lesson plans.
“Based on that feedback, technology could be used to create a more efficient and effective lesson-planning system,” Prof Robson said.
“Emerging EdTech and AI can also be utilised to improve individual student learning outcomes.
“However, because it's an emerging technology, there’s uncertainty — but the new emerging AI does offer a lot of promise in terms of being able to adapt to individual student learning abilities and those sorts of things.”
The shifts in technology are challenging to keep up with, Ms Marchioro said.
“SAGE is working as quickly as possible to provide AI and cyber training to help fill gaps for school leavers who perhaps don't have the EdTech that's as far advanced as what it may need to be.
“From a digital mindset perspective, we're looking into what that looks like from a senior leader point of view.
“How do we continue to grow that digital mindset? How do we ensure it’s not just new people entering our business out of school or university who have become technologically advanced in their thinking but that all people who contribute to our organisation have that adaptive and digitally enabled mindset?”
Prof Robson added: “The productivity implications of AI are difficult to predict, and it's even more difficult at an industry level.
“The thing about productivity changes is that sometimes they look like yeast where it’s something that will lift the entire economy — like the introduction of electricity.
“But, sometimes, it can be like mushrooms where productivity improvements pop up in places you least expect it.
“We just don't know what it's going to look like with AI.
“It could have implications right across the board; you do get that feeling, but on the other hand, it could be very uneven, depending on the speed of adoption.
“Some industries are very well set up to adopt new technology quickly, whereas with others, because of the way they're organised, trying to predict how that will all play out is fraught with difficulty.
“It all points to the need for an adaptable and flexible education system, one where you have basic skills being addressed, and students and lifelong learners are enabled to learn.
“That's the world we're in, and whatever comes along, you've got to be able to adjust to it as best you can.
“The role of government policy is to have the best tools available to people to be able to adapt, whether it's different training, education or systems.”
The other challenge with AI is regulation, Prof Robson said.
“Does Australia have the regulation in place to be able to deal with AI from a risk perspective and get the most out of it, or do we need new regulations?
“That's a big challenge right across the world.
“Australia doesn’t necessarily want to be a first mover here, because there could be other large economies like the US and Europe, where, if we've got different settings in how we regulate technology from those big economies, that may not be what we want if we're living in a global world where skills and people can move across borders.”
Driving productivity improvements through workers’ skills and capability takes careful consideration, says Ms Marchioro.
“You need to be clear about where you're going to spend your dollar,” she said.
“Start by looking at how your work is organised. Is it appropriate for the type of work you’re delivering? Then work out what skills you need for your people to deliver on that work.
“Don't just focus on the technical skills; focus on the leadership capabilities. Everyone's a leader; it’s not about position, it’s about behaviour.
“Find the right ways to balance the technical uplift you need versus what leadership evolution is required. You need to be improving both alongside each other.”
Have a breadth of different ways to grow the people in your business, Ms Marchioro said.
“Learning is not just about sitting in a room or a virtual room - employees can learn and grow on the job or in forums.
“If you really want to shift the dial on productivity, they need to go through a cycle of reflection after learning is applied: learn a concept, apply it, reflect on the impact of the implementation of that practice and then go around the cycle again.
“Also, consider how you yourself are becoming a lifelong learner.
“What steps have you taken to adapt your skill set and mindset, and what toolkit are you leveraging to contribute to a culture of lifelong learning in your organisation?”
STAY TUNED for details of the Ai Group CET’s next webinar on April 30 which will showcase the degree apprenticeship in software engineering in South Australia.
This qualification recently won the Future Builder Award at Universities Australia’s Shaping Australia Awards.
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Wendy Larter is Communications Manager at the Australian Industry Group. She has more than 20 years’ experience as a reporter, features writer, contributor and sub-editor for newspapers and magazines including The Courier-Mail in Brisbane and Metro, the News of the World, The Times and Elle in the UK.
